Don’t Be a Victim of Consumer Fraud

Consumer fraud is big business. An estimated 13.5 percent of American adults were identified as fraud victims in one study by the Federal Trade Commission (FTC). There are many different types of crimes involved, including tax refund scams, fraudulent weight-loss programs, phony lottery or prize schemes and bogus work-at-home scams. You don’t have to be a victim, however. The Virginia Society of CPAs recommends steps you can take to avoid being taken advantage of.

Don’t be taken in by appearances

Scam artists and phony organizations are very good at presenting a professional image. The person at your door may be clean cut and friendly, the voice on the phone may be well spoken, and the mail offer you receive may be glossy and appealing. The person you speak to may also have very reasonable answers to any tough questions you ask. In some cases, the group that he or she represents may have a name that is similar to a well-known business or charity, making it seem as though they are affiliated with a legitimate organization. But remember that looks can be deceiving, and don’t make any decisions or commit any money based on a good first impression alone.

Beware of high-pressure tactics

Con artists like to take the money and run. If you’re being pressured to sign up or commit money immediately, then that’s a warning sign of possible consumer fraud. Instead of committing yourself right away, take the opportunity to consider the offer. Scam artists don’t want you to do this, because you may start to ask too many questions. But you should take time to be sure you understand what kind of commitment you’re making and how credible the offer seems. Consult experts, including your local CPA, an attorney or bank officer, for their advice.

Get it in writing

Don’t commit immediately to an offer made over the phone or in a door-to-door solicitation. Ask for some kind of documentation describing the offer being made, then read the materials and make sure you understand them.

Request references

Someone representing a legitimate organization should be able to provide references or some other verification about the group and what it does. Ask also for contact information where you can call the person making the offer. If they’re reluctant to provide this information — or if they insist that they’ll call you instead — you have good reason to be suspicious. However, don’t assume that someone who does supply contact information is necessarily reliable. They may simply be a con artist with a cell phone.

Never make a payment up front

In many scams, the thieves insist that you have won a prize, can have a new credit card or qualify for a guaranteed job — if you turn over a fee in advance. Legitimate businesses do not ask for processing fees up front for prizes or business opportunities, so this request is a sure warning sign of trouble.

Turn to the FTC

The Federal Trade Commission is a great resource for questions about possible consumer fraud. You can find information on their website, www.ftc.gov, or by calling (877) FTC-HELP [(877) 382-4357]. 

Ask your CPA

Your local CPA can work with you to consider any questionable offers you receive and help you spot possible fraud. Consult him or her on any financial question you or your family may have.

The Virginia Society of Certified Public Accountants (VSCPA) is the leading professional association dedicated to enhancing the success of CPAs. Founded in 1909, the VSCPA has approximately 8,300 members who work in public accounting, industry, government and education. For more information, please visit the Press Room on the VSCPA website at http://www.vscpa.com/, e-mail vscpa@vscpa.com or call (800) 733-8272. For more information on financial literacy topics like money management, or to search for a CPA in your geographic region, visit http://www.financialfitness.org/.

© 2008 American Institute of Certified Public Accountants